Will Brazil abandon oil? This was the central theme of debate among specialists this Monday (07).

Would abandoning oil be one of the inevitable actions in the energy transition process in Brazil? Understand the views of experts

Specialists in the energy sector discussed the energy transition and the future of the oil, gas and derivatives market in Brazil. The clash of ideas, essentially about whether Brazil is going to abandon oil, took place in a virtual meeting on Monday night (07), promoted by SPE Brazil Section.

With the intention of disseminating technical knowledge to the different demographics of its members and public, the executive president of the Brazilian Association of Biopolymers Composting and Composting (ABICOM), Sérgio Araújo, and the Country Manager of NORWEP, Adhemar Freire; and on the other side, FGV Energia researcher Fernanda Delgado and oil and gas specialist Marcelo Gauto.

The debate, which was broadcast live on YouTube, was mediated by IC&P director Mauro Destri. We brought all the details in this full report. However, if you prefer, you can check out the event in its entirety. by clicking here.

What are the two biggest challenges for the creation and education of decarbonization policies in Brazil?

If Brazil is going to abandon oil, in search of reducing and, in the future, eliminating carbon dioxide emissions, public actions and policies by the sectors involved are important.

Decarbonisation, however, is a process that has overcome challenges in creating renewable energy and educating society as a whole.

Fernanda Delgado argued that it is necessary to reduce dependence on oil in Brazil, taking advantage of natural resources for energy production. She cited the Amazon as a major power in issuing carbon credits. But she pondered that the energetic transition does not happen overnight and that it is necessary that the values ​​are consistent with the purchasing power of Brazilians.

Sérgio Araújo followed with the same reasoning, without opposing. But he added that the biggest challenge is the cost of new fuel sources. That is, the ability of Brazilian society to pay the costs and the balance to avoid high costs.

Last week, the National Petroleum Agency (ANP) informed that the maximum reference price for diesel oil in the next auction will be R$8 per liter (about three times the value of the fossil diesel that comes out of the refinery).

Araújo also raised a question: What to do with the existing reserves and contracts that the country has?

“We are a surplus in oil and gas production. We just broke another record with almost 13 million cubic meters of oil (produced). Are we going to continue stimulating investments?”, said Sérgio Araújo.

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Should Brazil abandon recent oil discoveries in favor of world neutrality?

With this theme in the middle of questioning whether brazil should abandon this oil discovery, Marcelo Gauto and Adhemar Freire conflicted their ideas about Repetro's investments.

“Brazil must abandon any kind of subsidies for fossil fuels. One of them is Repetro, which we revalidated until 2040. We continue to 'cover the sun with a sieve'. The problem is Brazil's tax structure. We have to rethink.”, added Gauto, who also made a point of emphasizing how much he is against price interference in oil derivatives. “This type of subsidy should be execrated, abandon any idea of ​​a fossil fuel subsidy”.

In Brazil, the average consumption of barrels of oil is 2.2 million per day.

On the other hand, Adhemar Freire defended the continuation of investments in revitalization of the oil 'mature points' (fields that have already produced more than expected to produce).

“I think Repetro has to exist. Because it is a way to make projects attractive at a lower and more viable cost. I am an enthusiast of renewable energies, but I think that this transition will continue to walk alongside fossil energies towards decarbonization, commented Freire.

Adhemar Freire is also a defender of executing investment plans, such as oil and gas block auctions, while these resources still have value and demand.

Counterpoint also to the International Energy Agency

This also contradicts the International Energy Agency, whose premise is to reach the goal of zero emission of polluting gases by 2050.

Freire believes that maintaining investments can favor society in the form of employment and income, as demand may be attractive for the next 30 years.

For this, investors have to be aware of market movements. But investments in decarbonization (energy transition) must remain heavy.

What is Repetro?

The pre-salt layer, with huge chains of carbon, is one of the most important oil discoveries. It is defined as sedimentary rocks formed more than 100 million years ago at the bottom of the Atlantic Ocean.

Repetro is the customs regime aimed at the export and import of goods related to research and mining of oil and natural gas deposits in Brazil. The regulation is based on Decree No. 6759.

Should Brazil be more concerned with carbon emission neutrality than other economies?

At this time, the pairs of debaters were reversed. And the conflict of ideals remained technical and rich in information.

Considering that the energy transition is a global goal, and could involve the abandonment of oil, Sérgio Araújo said that everyone has to be concerned with emission neutrality.

“If we look at the history of Brazil, we will see that in the 70s, (Brazil) was a very successful pioneer in this issue of emissions. We had biodiesel launched in 2007 and our energy matrix is ​​44% renewable, while the average of other countries is 14%. So I don't see any concern for other countries”, said Araújo.

Marcelo Gauto disagreed. He said that Brazil should be more concerned than other economies, but facing the challenges as an economic opportunity, and not as a burden. He called the country's “moral duty” to be at the forefront in the process of depollution due to natural resources.

“We have a moral duty to seek emission neutrality even more than other countries, even though they are much more polluting. And we can do this by generating wealth and income. There are many countries that do not have the same natural conditions, but are going to invest heavily”, argued Gauto.

Is neutrality by 2050 viable for countries like Brazil?

The proposed carbon neutrality is a global target for up to 2050. Each country has its own challenges to achieve this goal, due to the history of the economy, climate conditions, geography and financial resources.

At the heart of this issue, ending the SPE Versus Series, Adhemar Freire and Fernanda Delgado made their assessments.

From beginning to end on this issue, Freire was skeptical in his position and brought reflection on the abandonment of oil:

“Is it possible that in thirty years all aircraft, ships, cargo and urban mobility fleets will be 100% powered by clean energy? We have an unequal society with different demands, I think the implementation of electric vehicles in Brazil is far away while there is no technology that gives access to consumers from different social classes”, said Freire.

For Fernanda Delgado, what has to be consolidated is how viable it can be for Brazil to become an exporter of clean energy solutions. And she pondered the 2050 goal for the planet to be free of fossil fuels.

“You don't make respirators and sun and wind medicine. So there is a gap temporal, spatial and physical chemical that will not be compensated so quickly. 2050 is 'day after tomorrow'. Our projects take seven years to produce the first oil. Instead of OK discussing whether our investments will wane or not, is thinking about how to make money with our expertise in biofuels. Brazil can be an exporter of solutions”, he concluded.

Investments in clean energy grow again in the world in 2021

Investments in the clean energy sector are expected to grow by around 10%, reaching around US$1,9 trillion in 2021, after declines due to the Pandemic.

However, these investments are still insufficient for the transition from clean energy to meeting the climate of the Paris Agreement. The aim is to keep global warming below 1,5°C.

The estimates are from a report by the International Energy Agency, published last Wednesday (2) and which was debated by specialists in the SPE Versus Series.

According to World Energy Investment 2021, investments in the electricity sector are expected to increase by around 5% this year, to over US$820 billion.

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